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How CNN’s Early Start Anchor Really Manages Her Money

Christine Romans’ alarm goes off at 2:30 a.m., a time when most people are rolling over to enjoy another few hours of sleep.

Fueled by “lots and lots of black English breakfast tea,” she’s seated in the anchor chair at 4 a.m. when she and co-anchor John Berman go live on CNN’s morning show, Early Start.

Romans, who joined CNN in 1999 and is also the network’s chief business correspondent, has watched how the effects of the 2008 recession shaped a generation of young workers so unlike any previous generation that the old rules of climbing the corporate ladder to achieve the American dream just don’t apply.

CNN Anchor

That’s one reason Romans made millennial finances the subject of her latest book Smart is the New Rich: Money Guide for Millennials.

The biggest challenge she sees — money-wise — for the majority of millennials is debt and getting out of it.

“You’ve got to get that debt out from under you or you are going to have a hard time entering the middle class,” she says to the generation of Americans born between the early 1980s and late 1990s.

We talked to Romans about the financial advice she offers to millennials and what she’s learned in 20 years of reporting on the finances of American households.

Christine’s Money Tips:

1. Keep your burn rate less than your earn rate — or live below your means. Ideally live on between 70 and 85 cents of every dollar you earn. Save and invest the rest.

2.  Pay off student debt as soon as you can. When living with student loans, and paying them off, live like a student. Pay more than the minimums and get them out of the way.

3. Start investing as young as you can. Even if you are still paying off student loans, a company-sponsored 401(k) provides tax benefits and possibly free money with a matching benefit and is critical to building your wealth.

What unique challenges do people in their 20s and early 30s have that previous generations didn’t?

They have student loan debt. The student loan debt means they need to be employed as quickly as possible in a career that will pay down their debt. And they have to be immediately paying down debt, quicker than other generations have had to, simply because of the size of the student loan debt they have.

How are millennials different from Generation X or the Baby Boomer generation?

It’s the first completely technology native generation. This generation uses, appreciates, and depends on technology in a way that no other generation does.

Millennials were brought up in a period of war and terrorism and financial crisis. Many of them saw their parents fret about their house value, about not being able to save enough for college, and they’ve taken on more debt than any other generation.

I’ve profiled too many people who are in their late 30s who should be really launching into the economy, especially now that it’s improving so much, but they have just too much debt [to do that].

How are millennials doing paying down their debt and entering the workforce?

I break them out into two groups. Two-thirds of college students are graduating [or have graduated] with debt. There’s a one-third group that is not. And that group is sitting pretty. They are already trading stocks. They are already in 401(k)s or designing their own retirement accounts. There’s this acronym — and I didn’t make up this acronym — they’re called HENRYs: High-earner-not-rich-yet. These HENRYs, they are going to rule the world.

What are the HENRYs doing right?

The common denominator for these successful millennials is that they are saving early and they are living below their means. They get that you’ve got to live on 85 cents out of every dollar that comes in. They’re confident.

“The common denominator for these successful millennials is that they are saving early and they are living below their means.”

That’s another thing that makes this generation so interesting — they are confident in their own abilities and they have high expectations of the job market. They want value for their experience and their money. It’s just a fascinating, huge, educated, and diverse cohort of people.

How has reporting on money changed your own financial habits?

I am conservative when it comes to money in that I’m really adamant about living below my means and I don’t like to take too many risks. But 20 years of reporting has convinced me I do need to take some more risks. I shouldn’t be fearful all the time. I need to make sure that I’m more aggressive with stock in my investment portfolio.

Do you have any debt?

No. After college, I had one small loan for a study abroad program. I painfully paid it off. I think I paid it off in a matter of months. I paid my rent, I paid that, and I think I gave myself $30 a week to live on until it was paid off. I couldn’t sleep at night knowing I had that debt. Some people can sleep at night with debt. It’s a comfort zone I could never get in.

What do you splurge on?

Technology and travel are my two big splurges.

I believe in acquiring memories, not things. I would much rather take a trip than buy a dining room table. I have three little kids and I’m trying to teach them to be grateful for things and that experiences are more important than things.

The next big family trip will be to Paris. The dollar is strong [against the euro] so it’s a better value and when I take trips I want them to be with a purpose. I want to show my kids that we are going to contribute to the French economy as a sign of solidarity [after the attacks in November 2015.]

What money mistake did you make that you don’t want your children to repeat?

The money mistake that I usually tell people is that I didn’t buy real estate in New York City. I remember living in New York and watching prices go up. It seemed crazy to me that something with only one bathroom in Manhattan would cost $500,000. Now that half-million-dollar apartment that I thought didn’t make any sense is worth $1.2 million.

What’s the best piece of financial advice you’ve ever gotten?

My dad preached to us that you have to keep your burn rate less than your earn rate. That is something that is so critical. I’ve interviewed billionaires, mega-millionaires, millionaires, and the little old lady who had a tiny pension and managed to save $1 million for retirement.

With all of those people, the common denominator is they live on less than they earn. And they take the difference and they grow it.

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